There could soon be some relief for hard-pressed shoppers as an expert said there was "light at the end of the tunnel" in regards to spiralling food costs. Budgets have been stretched over the past year or more as high inflation has seen the cost of many staple items rocket.
But Laith Khalaf, who is head of investment analysis at AJ Bell in Bristol, told the BBC that Tesco's decision earlier this week to cut the cost of its milk indicated there was "some light at the end of the inflationary tunnel for consumers". After months of rises on products across people's trolleys, the supermarket giant announced its first reduction on the price of milk in three years, with a four-pint bottle of milk was coming down from £1.65 to £1.55, two pints from £1.30 to £1.25 and one pint from £95p to 90p.
Mr Laith said the move by Tesco suggested the "fiercely competitive" supermarket sector wasn't "simply going to cash in on profits as wholesale costs fall", reports the Mirror. Food prices in the UK have increased significantly due to rising inflation, which remains in double-digit figures.
Last month, the Office for National Statistics said prices for food and non-alcoholic drinks increased by 18.3% on a yearly basis. Bigger supermarkets such as Tesco, Asda and Sainsbury's are having to constantly monitor their prices amid stiff competition from discounters Aldi and Lidl.
The two German discount chains have seen a rise in demand since the cost of living crisis began as shoppers are looking to find the cheapest products and most cost-effective deals. Tesco said the price reduction was down to a "cost price deflation for milk across the market in recent times" and it wanted to "pass that reduction on to customers".
Another financial expert told the Daily Mail that the "supermarket price war" had been underway "for a considerable amount of time". More expensive supermarkets were slashing their pricing to keep hold of shoppers, they claimed, but customers shouldn't expect to see price reductions across the board just yet.
Richard Hunter, head of markets at Interactive Investor said: "'The supermarket price war has been underway for some considerable time, and in the current environment basement prices have become extremely important to the cost-pressured consumer. The reduction in milk prices will be a welcome development, but with food inflation overall still around 17%, upward pressure on prices are very much intact."
